New Biweekly Premium Rates Effective 4/1/07

In January 2006, the state began requiring state employees and retirees to share in the cost of reimbursing Medicare-primary enrollees in the New York State Health Insurance Program (NYSHIP) for their Medicare Part B premium contribution.  The state accomplished this by adding the expense for the Medicare Part B premium reimbursement to the NYSHIP premium rates.  This action was challenged by PEF working with a coalition of other state employee unions, and a recent NYS Supreme Court, Appellate Division decision ordered the removal of the Medicare Part B expense from the 2006 and 2007 Empire Plan and HMO rates.

Health Insurance Rate Changes

Because of the Court’s decision, the state is changing the 2007 NYSHIP premium rates effective 4/1/07. For most PS&T Unit employees, including those enrolled in The Empire Plan, the biweekly premium contribution will decrease. However, for employees in HMOs that are more costly than The Empire Plan, their biweekly premium contribution will increase. This is because, while the state pays 90% of the cost for Individual coverage and an additional 75% for the cost of dependents for Family coverage, the state’s contribution for HMOs is capped based on the Empire Plan’s premium. Since the 2007 rates currently in effect included the cost of the Medicare Part B component, the premium for the Empire Plan was higher than it should have been. This resulted in an overpayment of the state’s share of the premium for employees enrolled in those HMOs that cost more than the Empire Plan. The 4/1/07 rate changes will begin on 3/29/07 for Institution Payroll employees and on 4/4/07 for Administration Lag Payroll employees.

A copy of the new rate chart can be found here.

Special Option Transfer Period

The state will hold a special option transfer period through 3/30/07. Only those employees currently enrolled in HMOs whose premium will increase as a result of the 4/1/07 rate change will be permitted to change their health plan option during this special option transfer period. The deadline for HMO enrollees who want to change health plan options is 3/30/07.

Only NYSHIP enrollees currently in the Options/Coverages listed here will be allowed to change health plans by 3/30/07.

Enrollee Communications

Beginning February 22, 2007, the state will send each NYSHIP enrollee a new premium rate chart and a letter that explains the rate change and the special option transfer period for eligible enrollees.  Along with the premium rate chart and letter, those employees enrolled in HMOs with premium increases will receive a Special Option Transfer Form and HMO Enrollment Form.  The state is only sending these forms to HMO members whose premiums will be increasing.  Employees are instructed to contact their agency Health Benefits Administrator (HBA) for information and assistance.

Retroactive Adjustments

In addition to the 4/1/07 rate change, a retroactive adjustment will be done to account for the removal of the Medicare Part B component from the rates that were charged to NYSHIP enrollees between 1/1/06 and 3/31/07.  Harold Eisenstein, PEF Associate Counsel, and attorneys from OMCE and several of the other state employee unions, continue to work with the Attorney General’s Office on implementation of the Court’s award.  When more information on the retroactive adjustments becomes available, we will post it at www.pef.org.